National Labor Relations Board Concedes that some Franchisees and Franchisors Should Not Be Considered Joint Employers, but Overall Legal Battle Far from Over

Press ReleaseMay 14, 2015

ATLANTA, GA – Today, after months of campaigning against a potential “joint employer” rule from the National Labor Relations Board (NLRB), the Job Creators Network (JCN) sees this week’s memorandum of advice from the NLRB concluding that some franchisors and franchisees should not be considered joint employers as a positive step, but warns that the legal battle is far from over. The “joint employer” rule, which would upend the franchise system as it exists and threaten the American Dream for tens of thousands of entrepreneurs, is strongly opposed by the Job Creators Network and is the target of JCN’s campaign — Defend Main Street — that includes national advertising, media outreach, and grassroots efforts.

“We are cautiously optimistic to see the National Labor Relations Board back away from the ‘joint employer’ recommendation it made last year, but see this as only a small step. JCN will to continue to carry the megaphone on this campaign along with brave small business owners who join with us,” said JCN President and CEO Alfredo Ortiz. “While we consider the NLRB’s memorandum of advice a small victory in this battle, we have not won the war against government overreach and will maintain pressure on the NLRB and other unelected government bureaucrats who prevent economic growth, prosperity, and the American Dream.”

If the General Counsel’s recommendation were to take effect, franchisors and franchisees would be considered “joint employers” of any employee of the franchise, which would increase liability among franchise owners, increase costs of franchising, and threaten franchisee’s control over their small business. The increased liability costs associated with the rule would be particularly devastating among minorities, who currently account for 1 out of every 5 franchise owners and generally have less access to capital.

For a short explainer video on the original NLRB “joint employer” recommendation, please click here.

JCN worked with partners like the International Franchise Association, the American Hotel & Lodging Association, the Asian American Hotel Owners Association, and Coalition of Franchisee Associations, to hold rallies in Atlanta, Georgia and Tampa, Florida, where small business owners gathered outside of the regional NLRB offices. The rallies are one component of JCN’s overall campaign that included national advertising, media outreach, and grassroots efforts. The campaign includes a petition on its website — DefendMainStreet.com — calling on small business owners and citizens to “Pledge to Defend Main Street” and “Let the NLRB Know: This is Unacceptable.” View the petition here.

There are 770,000 small businesses in America that are part of the franchise system supporting 18 million direct and indirect American jobs.